Justification of the Institutional Approach in the Study of Regional Transformative Investments

The relevance of the topic is determined by the formation of a sustainable development paradigm requiring the implementation of investment strategies aimed at achieving combined social, environmental, and economic value. The specificity of transformative (impact) investments, which lie at the intersection of interests of the state, business, and civil society, dictates the need for a methodological framework that considers not only financial but also social, cultural, and informal determinants of investment behavior. The aim of the study is to scientifically substantiate the institutional approach to the study of transformative investments and to form a set of methodological approaches revealing the specifics of their implementation in the socio-economic space of the region. The research tasks include analyzing the evolution of institutional theory in the context of investment processes, examining the influence of formal and informal institutions on investment activity, substantiating the role of transaction costs, identifying institutional barriers, and systematizing methodological institutional approaches. The research results demonstrate that the effectiveness of transformative investments depends on the ability of the institutional system to generate incentives for growth, ensure the congruence of rules, and take into account the historical and geographical features of the territory. The necessity of synthesizing behavioral-institutional, network, contractual-institutional, and institutional-transformational approaches is substantiated. The scientific and practical significance lies in forming an algorithm for studying transformative investments – from identifying institutional barriers to substantiating social transformations, which creates a foundation for improving regional investment policy. The scientific novelty consists in systematizing institutional factors determining the specifics of transformative investments, distinguishing between the methodological and methodical levels of the approach, and synthesizing four methodological approaches that expand the understanding of mechanisms for implementing transformative investments in the region. The institutional transformation of the regional system represents a multi-phase process requiring coordination of institutional actors' actions and consideration of long-term social effects. The strategic goal of such transformations is to form an optimal economic structure that flexibly responds to societal demands.